ZEELAND — In the shadows of the COVID-19 pandemic, office furniture manufacturer Herman Miller Inc. reported a 29.1 percent drop in net sales for the fourth quarter of its 2020 fiscal year that ended May 30, 2020.
Still, Herman Miller executives found reason for optimism in the company’s positive cash flow generation and the strength of the company’s balance sheet.
Zeeland-based Herman Miller (Nasdaq: MLHR) generated $475.7 million in net sales for the quarter, a drop of more than 29 percent from $671.1 million in the same quarter a year ago.
The company also reported a net loss of $173.7 million, or $2.95 per share. That included $205.4 million in non-cash charges the company incurred in opting to write-down goodwill, intangibles and right of use assets in the fourth quarter. The move followed the results of an annual impairment review process “and indicators of impairment arising from the impact of COVID-19 on financial results,” the company said in its earnings release.
In the fourth quarter of fiscal year 2019, Herman Miller reported $46.2 million in earnings, or 78 cents per diluted share.
For the full fiscal year, Herman Miller generated $2.48 billion in net sales, a year-over-year decrease of 3.1 percent. On an organic basis, net sales decreased by 6.6 percent compared to the previous fiscal year.
The company also reported a net loss of 9.1 million, or 15 cents per diluted share, which compares to net earnings of $160.5 million, or $2.70 per diluted share, a year ago.
Herman Miller said new orders for the fourth quarter reached $535.3 million, off more than 19 percent from a year ago.
Despite the expected drops, Herman Miller President and CEO Andi Owens was optimistic on the company’s ability to recover by seizing on commercial and residential opportunities that are poised to open up ahead.
“As we look ahead, we are encouraged — the global economy is beginning to restart and our strategy positions us extremely well for the opportunities ahead,” Owens said in a statement. “We are actively applying our knowledge and research capabilities to help our customers re-imagine both their office spaces and their home environments.
“Our multi-channel distribution model supports a diverse revenue base that allows us to reach commercial and residential audiences across the globe. In particular, our digital transformation roadmap has become even more of an imperative and we expect these investments will help us leverage opportunities to serve the changing needs of our customers in the months ahead.”
The company ended the fourth quarter with $454 million in cash on its balance sheet. CFO Jeff Stutz said in the earnings statement that the liquidity would be beneficial in helping Herman Miller “navigate the uncertain business conditions that we are facing.”
The company also declined to offer guidance for its current 2021 fiscal year “while this uncertainty persists.”
According to the earnings release: “The outbreak of COVID-19 has created a high degree of uncertainty throughout the global economy. Due to this uncertainty, and the rapidly changing effects of risk mitigation efforts to control the outbreak around the world, we are not able to reasonably estimate the impact of the outbreak on our business or financial results in the near-term.”
EDITOR’S NOTE: This story has been updated to correct an error in the headline.